Notes by family lawyer 'told about Obeids and tender'

By
Kate McClymont, Linton Besser

Nov. 15, 2012, 3 a.m.

A SERIES of damning handwritten notes made by the Obeid family solicitor revealed how the Obeids intended to capitalise on inside information about a government coal tender, a corruption inquiry heard on Wednesday.

Notes by family lawyer 'told about Obeids and tender'

A SERIES of damning handwritten notes made by the Obeid family solicitor revealed how the Obeids intended to capitalise on inside information about a government coal tender, a corruption inquiry heard on Wednesday.

The Independent Commission Against Corruption is investigating whether the family of former Labor powerbroker Eddie Obeid used confidential information provided by the then mining minister, Ian Macdonald, about the government's release of new mining areas to personally enrich the Obeid family to the tune of $100 million.

John Cherry, Kerry Packer's former tax adviser, told the commission of numerous conversations with Mr Obeid about the purchase of his property at Bylong.

''Eddie Obeid had some weird and wonderful option deal that I did not understand and I was not going to be part of,'' Mr Cherry said of Mr Obeid's proposed purchase of his property.

Some months after purchasing the property, Mr Cherry said, Mr Obeid called him asking to change the sale documents to hide the Obeids' interest. ''He wanted to appear as though he wasn't interested in the coalmining,'' Mr Cherry said.

Because Mr Cherry ''didn't trust the whole thing'' he knocked back Mr Obeid's request. ''I thought it was ridiculous,'' he said.

Under ICAC legislation, lawyers cannot claim legal professional privilege over documents. This allowed the commission to produce page after page of damaging documents from the Obeids' lawyer, Chris Rumore, which revealed the complex legal structures he set up to help the Obeids disguise the carve-up of the spoils of the yet-to-be-announced tender for coal exploration licences.

For example, Mr Rumore's notes of various conferences with Mr Obeid's sons, Paul, Moses and Gerard, in mid-2008 include such things as the successful tenderer was going to buy the Obeid land for quadruple its value.

''Deal that Obeids get 30 per cent of coalminer [successful tenderer] at no cost, held in trust by GAS [Greg Skehan, another partner at the law firm],'' was another file note.

The Obeids even knew, the notes suggested, how long the expression-of-interest process would be open to bids and who the winning bidder would be.

''Mr Rumore, reading your notes it occurs to me that this wasn't simply a blue-sky hope on the part of the Obeids that there was a possibility that perhaps one day they'd get an exploration licence,'' offered Commissioner David Ipp.

But Mr Rumore, the senior partner at Colin Biggers & Paisley, one of the oldest law firms in the country, denied knowing that this information was confidential.

Mr Rumore said that he never met Eddie Obeid and during 2008 he has not aware that Mr Obeid was a politician.

You didn't see his name in a newspaper? ''I don't read newspapers,'' he said.

Because his clients the Obeids and their associates discussed this information so openly, ''I just assumed it was common knowledge,'' Mr Rumore said.

When asked if he would have acted for the Obeids if he had known the process was a secret, Mr Rumore said, ''Absolutely not.''